Woman pleads guilty to theft of FEMA Katrina funds

GULFPORT — A former federal employee and her cousin pleaded guilty to wire fraud Wednesday in what may be the largest theft of disaster-relief money by individuals during Hurricane Katrina recovery.

Lashonda Booker, 35, and Peggy Hilton, 36, admitted conspiring to divert more than $721,200 in FEMA funds intended for legitimate applicants to their personal use.

The conspiracy occurred while Booker was employed by FEMA. She processed applications for disaster relief, including home replacement and rental assistance. Booker, of Moss Point, transferred to FEMA's Biloxi office in January 2006.

U.S. District Judge Louis Guirola Jr. set sentencing for April 29 at 9 a.m. Both women are free on unsecured bonds of $25,000 each.

The maximum penalty for wire fraud is 30 years in prison, a $1 million fine and five years' probation. It's likely they will receive lesser penalties because of their plea bargains.

The judge said he expects to receive a forfeiture order so the women can make restitution.